Blackstone seeks capital for Asia real estate fund
Investment house approaches HKMA and China Investment Corp to help launch fund targeting large-sized Asian property projects
Blackstone, one of the world's largest investment houses, is pitching to large institutional investors in Hong Kong and mainland China to help it launch a new real estate fund for Asia, where property prices are rising strongly.
Among the potential institutional investors, known as "limited partners" for their investments in private equity funds, that Blackstone has been talking to is China Investment Corp (CIC) in Beijing, and the Hong Kong Monetary Authority (HKMA), said people familiar with the matter.
CIC is the mainland's US$300 billion sovereign wealth fund, whose funding comes mostly from the country's massive foreign exchange reserves. The HKMA is the de facto central bank for Hong Kong and also manages the city's large reserves.
Both the CIC and the HKMA have a strong desire to diversify their investments abroad for stable and higher returns, rather than merely buying traditional assets such as foreign government bonds. China is already the largest holder of US debt.
"Both CIC and HKMA were pitched. Given their long-standing good business ties with Blackstone, I think it is very likely that both will put some money in its new real estate fund," said one of the people, who declined to be identified as the talks remain private and confidential.
Both CIC and HKMA were pitched. Given their long-standing good business ties with Blackstone, I think it is very likely that both will put some money in its new real estate fund
Blackstone began marketing its new Asia-dedicated property fund late last year and it aimed to raise a total of about US$2 billion for the fund, which would bet on large-sized property investments in major Asian economic powers such as China and India, said the sources.